Frequently Asked Questions about Rent Control 2.0

What is Rent Control?

Rent control is the government control and regulation of the amounts charged for rented housing.

Is Rent Control Common in New Jersey?

Yes, approximately 20% of New Jersey municipalities have some form of rent control.

What structures are included in Montclair’s new proposed rent control law?

Rental units in buildings containing 2 or 3 units in which the owner does not reside and all units in buildings containing 4 units or more with certain exceptions as listed below.

What structures are not included in Montclair’s new proposed rent control law?

• Single-family homes, single condominiums or single cooperative units
• Units in buildings in which the owner resides that contain 3 or fewer residential units
• Units for which the amount of rent is determined as a function of household income by a government program
• Motels, hotels, and similar type buildings intended for transient use, floor space used strictly for commercial purposes in any type building, including state-licenses rooming houses
• Dwelling units exempted by state or federal law, including units constructed after February of 2008

What are the permitted increases in the new proposed rent control law?

• A one-time 6% increase is permitted for units covered by this law where the owner did not collect an increase on an existing tenants’ annual rent since May 1, 2020 and where no tenant living in the unit is 65 years or older so long as tenant is notified in accordance with state law.
• With the exception of the one-time annual increase to *base rent, the maximum permissible annual rent increase on a dwelling unit is 4% of the *base rent, where no tenant living in the unit is 65 years or older so long as tenant is notified in accordance with state law.
• In any dwelling unit where at least one tenant is 65 years of age or older, the new maximum permissible annual increase on dwelling units covered by this law is 2.5% of the *base rent so long as the tenant is notified in accordance with state law.

*Note: Rent increases must be calculated on base rents as defined in Section 257-3 of the attached law.

Are month-to-month leases covered by the proposed law?

Yes, landlords may only raise rents once per year based on the above caps.

Are there exceptions for rent control on properties covered by the law?

Yes, the law provides landlords with the opportunity to pursue relief from the caps for several scenarios:

1. Vacancy Decontrol – From the effective date of the ordinance, the landlord is permitted to raise rents in excess of the above caps no more than one time every five years and only if there is a vacancy of the unit, meaning the tenant has not renewed their lease and has moved out.
2. Hardship Increases – Applicable when the annual operating expenses for any one building exceed at least 65% of the total annual gross income. Operating expenses shall include all reasonable expenses necessary to carry out the proper operation and maintenance of the property, including property taxes allocated to the year.
3. Major Capital Improvements – This is for an addition to the dwelling or housing space units that is for the benefit of the tenants, that was not previously provided or required to be provided by law or lease, that materially adds to the value of the dwelling or housing space and prolongs its life, and that must not be upkeep, maintenance, repairs, rehabilitation or replacement of items or services.
4. Major Additional Services – This is for an addition to the dwelling of housing space units that is to the benefit of the tenant, that was not previously provided or required to be provided by law or lease, that materially adds to the value of the dwelling or housing space and prolongs its life, that includes a substantial increase in services, furniture, furnishings or equipment provided to tenants since the date of the most recent rent increase under any section of this ordinance, and that must not be upkeep, maintenance, repairs, rehabilitation or replacement of items or services.

Is Parking Included?

• Yes, any parking rented in conjunction with the apartment rental is subject to the same increase caps.
• However, any parking provided to a tenant by a third party unrelated to the landlord and negotiated between the tenant and said third party separately from the apartment rental and outside the apartment rental location, is not covered.

How will the new rent control law be enforced?

• The law establishes a new position in Montclair’s Township Government: Rent Control Officer. This person’s responsibilities will include maintenance of all relevant records and other data and information; supplying information and assistance to landlords and tenants and to bring landlords and tenants together in formal conferences to suggest resolutions of conflicts; ensure compliance of the law by landlords and tenants; remedy violations of the law including bringing appropriate legal charges if necessary; accept, process, investigate and determine complaints with regard to vacancy decontrol; collect and maintain accurate Rent Registration Statements; prepare forms for various processes outlined in this law.
• The law also establishes a Rent Control Board consisting of seven members who will be appointed by the Township Council. The Board will issue and promulgate rules and regulations; supply information and assistance to landlords and tenants; hold hearings and adjudicate various matters; approve and accept settlements; require landlords to produce financial and other records in order to adjudicate matters and more.

As more Frequently Asked Questions are identified, this post will be updated. This will also ultimately become the function of the office of the Rent Control Officer with Montclair Township’s Government. This is the interpretation of Montclair’s new rent control law by Councilor Peter Yacobellis and not the official representation of the law by Montclair’s Township Government.